New State Incentives & Legislative Updates

Real Estate Insights

August 15, 2025

New State Incentives & Legislative Updates for Brownfield and Infill Redevelopment

As local real estate appraisers serving Central and Coastal California, staying current on new state incentives & legislative updates (SB 450 & AB 821) affecting brownfield and infill redevelopment is essential for accurately advising clients and assessing property potential. Here’s what you need to know:

SB 450: Strengthening Streamlined Housing Approvals

Background:
SB 450, signed into law on September 19, 2024, builds on the momentum of SB 9. It removes several local government barriers that slowed infill housing:

  • Local governments can no longer impose non-uniform objective standards or discretionary reviews on qualifying infill developments.
  • Approval timelines are shorter. Agencies must approve or deny applications within 60 days, or the project gains automatic approval.
  • Agencies cannot deny projects solely due to perceived “adverse impacts” on the physical environment. This increases certainty for applicants.
  • The Department of Housing and Community Development (HCD) now has the authority to oversee and enforce compliance, limiting local obstruction.

Appraisal Impact:
Sites once hindered by strict standards or long entitlement risks may now command higher values. Improved feasibility and faster timelines under SB 450 make them more attractive to buyers and developers.

AB 821, AB 130 & SB 131: CEQA Reform for Infill and Brownfields

Although AB 821 focuses on aligning development with local general plans, major changes come from AB 130 and SB 131, both signed into law on June 30, 2025:

  • Together, they provide broad California Environmental Quality Act (CEQA) exemptions for infill housing, especially on brownfield sites.
  • Key Incentives:
    • Projects up to 20 acres in urbanized areas now qualify for statutory CEQA exemptions.
    • Remediated brownfield sites, once excluded, are now eligible if cleanup is complete and confirmed.
    • CEQA review for non-exempt projects is limited to the specific disqualifying environmental condition, not a full Environmental Impact Report.
    • Approval and litigation timelines are shorter, cutting average entitlement time by 12–18 months and saving developers millions.

Appraisal Impact:
Formerly stigmatized parcels, like old industrial sites or ex-gas stations, are now far more marketable once remediation is complete. Lower risk and faster entitlements can raise demand and values.

Recent Market Results

  • Affordable and infill housing construction increased 13.1% in 2023, with strong growth in lower-income and very low-income units.
  • Entitlement processing times are at historic lows: an average of 64 days for entitlements and 85 days for permits.
  • Accessory Dwelling Units (ADUs) now account for one in five homes built statewide.

Practical Takeaways for Appraisers

  • Track cleanup documentation (Phase I/II ESA, DTSC, or Water Board approvals) for brownfield sites. These determine CEQA exemption eligibility.
  • Confirm that local planning processes match new state laws. Some jurisdictions may lag in updating their systems.
  • Expect more developer interest in remediated infill and brownfield parcels, especially in urban cores and near transit.
  • Monitor state grant opportunities like CalReUSE and the Cleanup in Vulnerable Communities Initiative, which often favor disadvantaged communities.

This year marks a major turning point in California’s approach to brownfield and infill redevelopment. SB 450, AB 130, and SB 131 deliver the broadest reforms in decades. They reduce legal barriers, speed approvals, and expand market potential. For appraisers, these changes require updated highest-and-best-use determinations and revised feasibility assumptions.

We are here to help. If you have questions or need guidance with challenging appraisals, please contact us.

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